South Africa declares emergency
CAPE TOWN, South Africa (AP) - January 25, 2008 The government said there was no foreseeable end to the
electricity shortages that have spilled over the nation's borders
into Botswana and Namibia, which rely heavily on South African
energy exports.
"The unprecedented, unplanned power outages must now be treated
as a national electricity emergency situation that has to be
addressed with urgent, vigorous and coordinated actions," Public
Enterprise Minister Alec Erwin told journalists after a Cabinet
meeting.
"We are viewing the next two years as being critical," he
said, as government officials unveiled a package of measures,
including rationing, price hikes and a renewed push for alternative
energy sources.
The crisis reached new heights Friday when mining companies
including AngloGold Ashanti Ltd., Harmony Gold Mining Co. Ltd. and
Gold Fields Ltd. suspended all but emergency operations on some of
the world's largest gold mines out of fear that power outages could
trap workers underground. The stoppage may add up to hundreds of
millions in losses for one of South Africa's most important
industries and fracture investor confidence that is already
rattled.
Gold Fields - whose South African operations produce 7,000
ounces of gold per day - said state utility Eskom had warned the
disruption could last up to four weeks. Eskom asked mines to cut
electricity consumption by 60 percent per month.
Gold and platinum prices soared to record highs Friday.
An ounce of gold for February delivery spiked to $924.30, a
fresh record, on the New York Mercantile Exchange before easing
back to $912.30, up $6.50. April platinum peaked at a new high of
$1,694.90 an ounce. Prices later retreated to $1,674, up $61.
Diamond giant De Beers Consolidated Mines said it had stopped
production in its six South African mines.
The trade union Solidarity said that BHP Billiton's manganese
mines were closed and electricity supplies to three aluminum
smelters was discontinued. Samancor Chrome, the worlds second
largest ferrochrome producer, is planning to close its plants, it
said. Ferrochrome is used to produce stainless steel and most of
that is produced in South Africa.
Rolling blackouts in South Africa have begun to arrive without
warning.
Nearly forty people were trapped in a cable car in high winds
for two hours this week at Table Mountain, a tourist destination
that overlooks Cape Town. Some climbed through the roof to escape
to a loading dock more than 2,000 feet above ground. Hundreds more
were stranded at the top of the mountain.
"The knock-on effect on Cape Town is immeasurable," said Simon
Grindrod, a Cape Town city councilor. "A headline today is lost
business tomorrow."
The South African Tourism Services Association said the crisis
is jeopardizing soccer's World Cup games, to be held in South
Africa in 2010.
Erwin said measures taken over the next two years would help
ease pressure on supply ahead of the World Cup.
"There is no threat to the successful holding of the event,"
he said.
The government and Eskom say South Africa's economic growth has
outstripped energy supplies and the nation must cut use by 10
percent to 15 percent. The government has acknowledged for the
first time it shares some blame for ignoring a 1998 Eskom report
warning of a serious energy crisis within 10 years. The government
approved a new power station building program in 2004.
Erwin said the government, however, will not freeze planned
electricity-gobbling industrial projects, like a big new aluminum
smelter, as had been suggested by Eskom.
Minerals and Energy Minister Buyelwa Sonjica said South Africa,
which has until now relied heavily on its cheap and abundant coal
for electricity, would put more effort into developing renewable
energy. The government was also considering emergency measures to
compel South African mines to supply Eskom with more and better
coal rather than exporting it.
"If they don't give us the coal, they don't get the
electricity," said Erwin.
Minister Sonjica said the government is studying countries like
Brazil and Cuba that have been forced to ration energy. South
Africa is now considering quotas, with fines for exceeding allotted
energy use, Sonjica said.
Sonjica also said the government hoped that a million solar
water heaters would be installed in the next three years and that
measures were being considered to oblige hotels, hospitals and
other institutions to use solar power.
Traffic lights may soon rely on solar power as well. Cape Town
has pioneered a successful experiment, helping to minimize traffic
snarl-ups now being caused by signal failures.
Electricity prices, which are expected to rise 14 percent this
year, will likely continue to rise by a similar margin for the
foreseeable future, said Erwin.